17th Annual Tax Controversy Forum 2025 – Track III (Presented by NYU School of Professional Studies)

Kathleen Costello opens the 17th Annual Tax Controversy Forum with brief introductory remarks. This session sets the stage for two days of comprehensive updates on tax compliance, enforcement, and practice.

This session examines the unprecedented upheaval at the IRS, including dramatic staffing reductions of approximately 30,000 employees and extensive leadership turnover. Practitioners share experiences of disrupted cases, disappearing agents, and the challenges of navigating audits and appeals amid organizational chaos.

Expert panelists explore the future of IRS enforcement amid proposed 37% budget cuts and Inflation Reduction Act funding clawbacks. The discussion covers Pillar Two global minimum tax implications, the proposed Section 899 ‘revenge tax,’ digital services taxes, and the impact on APMA operations and regulatory guidance.

Appeals Chief Elizabeth Askey addresses the office’s 28% workforce reduction while highlighting expanded ADR programs that saw 25% increased receipts. Key initiatives include issue-by-issue Fast Track availability, Last Chance Fast Track rollout, and reconsideration of Appeals Case Memoranda practices.

This panel covers Tax Court statistics showing 70% electronic filing rates and over 2,450 pending conservation easement and micro-captive cases. Chief Counsel organizational changes include consolidating SB/SE and LB&I into a unified Litigation and Advisory division, plus new rules on limited entry of appearance and amicus briefs.

Panelists explore how conditions including depression, PTSD, OCD, and addiction disorders create tax compliance problems while potentially providing grounds for penalty relief. Strategies for working with psychologically affected clients include using expert reports, requesting accommodations, and leveraging Section 6511(h) financial disability provisions for refund statute extensions.

This session analyzes how the Supreme Court’s replacement of Chevron deference affects tax regulation challenges, noting that courts still largely uphold regulations despite the new ‘best interpretation’ standard. Key topics include delegation doctrine implications, Corner Post statute of limitations issues, and new IRS exceptions preventing invalidity arguments before Appeals.

The panel examines the legal framework for John Doe summonses from Bisceglia through modern cryptocurrency enforcement, using the Coinbase case as a detailed study. Discussion covers privilege considerations in law firm summonses, statute of limitations tolling under Section 7609, and options for John Does including voluntary disclosure and streamlined procedures.

This session covers bankruptcy as a strategic tool for resolving tax issues, including dischargeability rules requiring three-year, 240-day, and two-year conditions. Panelists compare Chapter 7 versus Chapter 13 approaches, contrast bankruptcy with offers in compromise, and address critical issues around substitute for return assessments and tax lien survival.

Practitioners explore paths to compliance including qualified amended returns, accounting method changes, quiet disclosures, and formal voluntary disclosure programs. Special attention is given to ITIN taxpayer barriers, return preparer fraud concerns, and the April 2025 IRS-DHS memorandum allowing taxpayer information sharing for immigration enforcement.

This interview session addresses historic leadership changes at the Tax Division and its evolving role in tax administration. Discussion covers resource constraints amid increasing tax cases in refund and bankruptcy courts, plus appellate representation on critical regulatory deference issues.

IRS Criminal Investigation Chief Guy Ficco and DOJ representatives discuss the signaling effect of criminal prosecutions on taxpayer compliance. The panel examines current investigation priorities and expectations for enforcement in a resource-constrained environment where deterrence signals become increasingly important.